A study on the effect of a structured problem-solving strategy on problem-solving skills and conceptual understanding of physics was undertaken with 189 students in 16 disadvantaged South African schools. This paper focuses on the development of conceptual understanding. New instruments, namely a solutions map and a conceptual index, are introduced to assess conceptual understanding demonstrated in students' written solutions to examination problems. The process of the development of conceptual understanding is then explored within the framework of Greeno's model of scientific problem-solving and reasoning. It was found that students who had been exposed to the structured problem-solving strategy demonstrated better conceptual understanding of physics and tended to adopt a conceptual approach to problem-solving.